HB 12-1321: Personnel System Modernization

Senator Johnston co-sponsored HB 12-1321, which aims to modernize Colorado’s outdated personnel system. The bill was passed by the Senate on April 10, 2012.

Merit Pay System

• Replaces the performance awards with a merit pay system in order to provide periodic salary increases for personnel, developed by the Department of Personnel Administration (DPA) director using a criteria based on the relationship between performance rating and salary range distributions.
• Initial system must include quartiles for the salary range distribution and three performance categories, with the highest performance category receiving the highest rate of merit pay.
• Establish priority groups (based on length of service, relation to salary range midpoint, performance, recruitment, retention needs, etc.) that receive merit pay increases based on available money.
• The following are ineligible to receive merit pay increases:
• An employee who receives an unsatisfactory performance evaluation
• An employee who is at or above the maximum amount of his or her salary range, but may receive non-base building merit payment.
• DPA must include the merit pay information and recommendations in the annual compensation report.

State Employee Reserve Fund

• Creates the fund with subaccounts for each department for the purposes of providing merit pay to certified employees.
• The heads of each department include eligible merit pay increases in annual budget requests.
• Any allowable annual reversions of money appropriated for personal services-related line items and other moneys may be credited to the respective subaccount of each department.
• Up to $2 million may be reallocated between departments by the Governor.

Appointments and Promotions

• Replaces the competitive test with a system based on a comparative analysis of candidates using objective criteria developed by the DPA director.
• DPA director must establish procedures to exempt a position from the state personnel system and to separate and demote a certified employee who is not eligible for retirement within five years of 2013.
• Expands the hiring pool of personnel applicants from three to six.
• Appointing authorities from departments to consider qualified certified employees that were laid off for any vacant, funded positions.
• Directs the DPA to establish a layoff plan for use by departments to provide post-employment compensation or other benefits to employees that are laid off.

Bumping Rights

• Limited bumping rights to those persons who, as of January 1, 2013, are within 5 years of being eligible for full retirement.
• Requires the DPA director to establish procedures for those employees who do not have bumping rights, giving consideration to performance evaluations and seniority.

Temporary Employment

• Extends the constitutional limit on temporary employment from six to nine months and establishes a four-month waiting period between temporary appointments for the same position.